Andronico’s Community Markets filed for Chapter 11 bankruptcy Monday after accruing debt from lost revenue in expanding the chain to other locations.
The family-owned grocery chain listed between $10 million and $50 million in debt and around the same amount in assets, according to papers filed at the U.S. Bankruptcy Court in Oakland.
The company, which operates four markets in Berkeley and single stores in Los Altos, San Anselmo and San Francisco, is negotiating a sale with Renovo Capital that will go through a due diligence period of between 60 and 90 days for the two companies to set the sale price.
As a result of the sale, consumers will experience “improvements” in the short term — including better-stocked shelves and maintenance for facilities — according to Andronico’s spokesperson Adam Alberti. The company is not currently planning to close any of its stores, and no employees will be laid off.
“The purpose of the Chapter 11 filing is to affect the sale, and the sale is required essentially because the company’s debt load is too high to continue into operations,” Alberti said.
In addition to lost revenue from expansion, an article by the San Francisco Chronicle mentioned that suppliers were not getting paid for their goods by the company. In response to the article, CEO Bill Andronico said in a May email to the Chronicle that the company would be looking to recapitalize in order to replace the its existing lending group.
At the store located at 2655 Telegraph Ave., shoppers were surprised to hear that the company had filed for bankruptcy, while mentioning that the chain often sells products at a much higher cost than other markets. Berkeley resident Debra Ratner said she normally shops at Andronico’s because of its close proximity to her house. However, she added that the expensive prices at the store “alienate” many prospective consumers.
Three East Bay locations closed between July 2004 and September 2006. Last month, a fourth location — located at Palo Alto’s Stanford Shopping Center — also closed its doors.
“I think it’s sad,” said Gracie Walovich, a UC Berkeley sophomore shopping Monday at the Telegraph location. “I don’t want it to disappear, because I actually like how convenient it is. They just closed one in Palo Alto, where I’m from, but now it’s like all making sense to me as to why they closed it.”
According to Alberti, Bill Andronico will continue as the CEO of the company, but ownership will change as a result of the bankruptcy.
“It will close one night as Andronico’s and open up as Andronico’s — it will just be a separate set of books and will be run under different ownership,” Alberti said. “The long-term goal is to improve its stores and to expand its presence and to continue to serve its customers in the Bay Area.”
Damian Ortellado of The Daily Californian contributed to this report.